Cisco cuts fewer than 4,000 jobs

Cisco said on May 13 that it will cut fewer than 4,000 jobs in its fiscal fourth quarter as the networking company redirects spending toward artificial intelligence, security, silicon and optics after reporting stronger-than-expected quarterly results. The San Jose, California-based company said the reduction represents less than 5% of its workforce. Cisco had about 86,200 employees as of July 26, according to Reuters. The company paired the announcement with raised full-year revenue guidance after saying demand from hyperscale customers for AI infrastructure accelerated. ### How many jobs is Cisco cutting, and when do notices start? Chuck Robbins, Cisco’s chair and chief executive, wrote in a company blog post that the company is making changes that “will result in the reduction of our overall workforce in Q4 by fewer than 4,000 jobs.” Robbins said most notifications will begin on May 14 and continue globally in line with local laws and regulations. (investor.cisco.com) Reuters reported that the reduction amounts to less than 5% of Cisco’s workforce. Reuters also said Cisco had about 86,200 employees as of July 26. ### What did Cisco say is driving the cuts? Robbins said the move is part of a restructuring meant to “reallocate resources” so Cisco can invest in “silicon, optics, security, and AI.” In the same post, he described the changes as “hard decisions” about investment, organization and cost structure. (blogs.cisco.com) (finance.yahoo.com) CRN, citing Robbins’ prepared remarks on Cisco’s earnings call, reported that the company announced the restructuring “to ensure we are capturing the significant opportunities in silicon, optics, security, and AI.” Robbins also said Cisco was making strategic investments in employees’ use of AI across the company while reducing roles in some areas. (blogs.cisco.com) ### How strong were Cisco’s results? Cisco reported third-quarter revenue of $15.8 billion for the period ended April 25, 2026, with GAAP net income of $3.4 billion, or $0.85 per share, and non-GAAP net income of $4.2 billion, or $1.06 per share. Cisco said the quarter delivered record revenue and double-digit top- and bottom-line growth. (crn.com) Reuters said the revenue figure beat analysts’ average estimate of $15.56 billion, according to LSEG data. The company raised its fiscal 2026 revenue forecast to $62.8 billion to $63.0 billion, from an earlier range of $61.2 billion to $61.7 billion. (investor.cisco.com) ### What did Cisco say about AI demand? Cisco said it has taken $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year and raised its full-year expectation to $9 billion from $5 billion. The company also said networking product orders rose more than 50% year over year and data-center switching orders increased more than 40%. (finance.yahoo.com) Mark Patterson, Cisco’s chief financial officer, said on the post-earnings call that it is “reasonable” to expect at least $6 billion of revenue on the AI hyperscale side in fiscal 2027, according to Reuters. ### How much will the restructuring cost? (investor.cisco.com) Reuters reported that Cisco expects the restructuring plan to cost as much as $1 billion. About $450 million of that is expected to be recognized in the fourth quarter, with the rest falling into fiscal 2027. (finance.yahoo.com) Cisco’s earnings materials also cautioned that forward-looking statements include risks tied to restructurings, including the size and timing of related charges. ### What comes next? Cisco said its fourth-quarter fiscal 2026 guidance calls for revenue of $16.7 billion to $16.9 billion and non-GAAP earnings per share of $1.16 to $1.18. (finance.yahoo.com) The company’s fiscal year 2026 guidance now calls for revenue of $62.8 billion to $63.0 billion. Most employee notifications are set to begin on May 14, while Cisco said the remaining restructuring charges are expected to extend into fiscal 2027. (investor.cisco.com 1) (investor.cisco.com 2)